Electricity utility company Eskom has confirmed a 10% price increase in electricity tariffs after a High Court ruling in its favour.
Eskom had moved to court to have the National Energy Regulator of South Africa’s (NERSA’s) multi-year price determination (MYPD), that saw Eskom lose R69 Billion, corrected to allow the company recover the lost funds.
The High Court ruled in favour of Eskom, allowing the company to recover the lost funds from consumers over a 3-year period. “The Court Judgement allows for the recovery of incorrectly deducted equity support that was provided by the government. It allows for the Eskom average electricity price to slowly migrate towards what the efficient price of electricity is,” said Eskom.
Following this announcement, South Africans should expect a price hike of 10% as from April 2021. Eskom had previously hinted at a 15% increase but this will no longer be the case.
Despite this increase, South Africa still remains among the top countries with the lowest electricity cost in the world. While the increase will no doubt cause an uproar among communities, Eskom addressed the concerns by confirming that the price increase would not adversely affect vulnerable sectors of the economy.
“It is understood that certain vulnerable sectors of the economy – poor residential customers and certain industrial sectors will require special consideration. Various measures are already in place to protect the poor,” stated Eskom.
This news, however, comes at a bad time when Eskom has implemented load shedding following a loss of some of the company’s electricity generators. What do you think of the price increase?